Maintain short positions. The COMEX Gold extended its sideways movement on Monday, losing USD4.40 to settle at USD1,779.50 – while still consolidating below the 50-day SMA line. During the week’s first trading session, the commodity started off with positive sentiment, gapping up to open at USD1,787.70. However, the bulls failed to sustain the momentum. Profit-taking brought the commodity to USD1,776.40 before the close. While the index is consolidating sideways, we observe that the 20-day SMA line is turning lower – if it crosses below the 50-day SMA line in the coming sessions, selling pressure on the precious metal may increase. We maintain our view that as long as the commodity trades below the 50-day SMA line, downside risks persist. For now, we make no change to our negative trading bias.

Traders should keep the short positions initiated at USD1,809, or the closing level of 22 Nov. To minimise trading risks, the stop-loss threshold is placed at USD1,825.

The immediate support is marked at USD1,762.20 (2 Dec’s low), followed by USD1,750. The immediate resistance is fixed at the USD1,800 round number, followed by USD1,819.30, or the high of 26 Nov.

Source: RHB Securities Research - 7 Dec 2021